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PayPal vs Venmo Questions (Quick Answers!)

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Disclaimer: This content is not intended to be financial advice and is for informational purposes only. aTimeforCash is reader-supported. We may earn commissions if you buy through our links at no cost to you.

As the first digital payment processor, PayPal has become one of the most widely used payment processors with nearly 400 million users.

While not as popular yet anyway, as of 2019 Venmo had over 50 million active users and is rapidly growing.

So which platform is better? What about for small businesses?

Let’s take a look in the article below.

In This Post:

Did PayPal Buy Venmo?

Venmo started 2009 its payment services in 2009. Three years later, the company Braintree brought Venmo in 2012.

Two years later, in 2014, PayPal brought Braintree and its other merchants for $800 million. As you probably know, one of those merchants is Venmo, which is one of the reasons PayPal paid so much to acquire Braintree.

Yes, PayPal purchased Venmo in 2014 and is considered Venmo’s parent company. Although both digital cash services operate according to their standards, have distinct brands, and are geared towards entirely different audiences.

Which Is Better Venmo or PayPal?

Your decision on which digital cash service to use depends on your purpose. A Venmo account is the best option if you need to make personal payments to your family and friends. Using Venmo for payments and exchanging messages with your contacts feels casual and friendly.

You can also use PayPal to pay someone you trust and Venmo to make business transactions. But which one is more effective for running your small business? In the next section, you will learn which one is ideal for your situation.

Is Venmo or PayPal Better for Small Businesses?

As a business owner, you know you need the right platform to accept payments from customers and provide a smooth checkout experience. So, PayPal vs. Venmo, which one is better for small businesses? Let’s examine the two services in more detail to decide which one may be right for you.

PayPal is a versatile payment platform that allows you to send and receive payments between peer-to-peer and businesses. It also allows companies to accept payments from all over the world, catering to a wide range of customers.

In addition, due to name recognition, customers are also likely to spend money on your services since it is a trusted name. PayPal lets merchants accept all major credit cards, Venmo, split payments, and even cryptocurrency.

Venmo focuses solely on peer-to-peer payments, with extra features for Venmo business owners. Among the features is creating a second profile specifically for their business to allow them to manage their transactions separately from their personal account.

Individuals who work as freelancers, personal trainers, or babysitters will benefit from the ability to receive payment and bill clients through a separate business Venmo account. In addition, if you own a store, you can accept payments in-store and offer rewards or cashback deals. Venmo also presents a great marketing opportunity owing to its social component, where your business appears in customers’ feeds.

But, PayPal is a much better option if you sell products or if you regularly pay for online purchases. Venmo Business accounts are available, but it’s still a relatively new service, and it doesn’t provide as much protection or guidance as PayPal.

How Long Does It Take To Transfer Money From Venmo to PayPal?

You cannot transfer money directly from Venmo to PayPal; you must take indirect measures. Therefore, the transfer is likely to take 3 to 5 business days. If you need more guidance on using Venmo with PayPal, read my guide here. 

Is Venmo Owned by PayPal?

Yes, PayPal is the owner of Venmo, as we discussed above. Due to the growing popularity of the social cash payment app among young users, PayPal acquired Braintree so it can own Venmo. Because it was a great company to invest in, they decided to take the chance to reach out to younger generations and offer services tailored to their needs.

Is Venmo Safer Than PayPal?

Both Venmo and PayPal offer high-level encryption and security in terms of safety. Although, PayPal does take some extra steps to ensure your cash is more secure.

When a transaction takes place, you will receive a confirmation email to keep track of it and remain vigilant. Moreover, they regularly scan your browser to ensure it has the latest encryption technology.

Due to the requirement that users register, Venmo stands out among PayPal. Even so, it’s essential to keep in mind that Venmo only reverses purchases if the recipient states they are okay with it. So, it can be challenging to get money back if you send it to the wrong person by mistake.

I think PayPal is safer than Venmo due it can be easier to receive the money you sent by mistake, and it offers more protection to customers and business owners. It’s better to set your business with PayPal services and allow your customers to pay with Venmo as an option.

Are Venmo and PayPal the Same?

PayPal and Venmo are two different services. It is evident in their branding that they are two completely different businesses. Venmo is meant more for friendly transactions, while PayPal is more business-based.

What Is the Difference Between PayPal and Venmo?

When comparing PayPal and Venmo, Venmo offers fast money transfer capabilities. With Venmo, you can also buy online, in stores, and with the app.

The Venmo no-fee option extends to debit card payments, while PayPal allows free payments only from bank accounts. However, PayPal also charges a higher fee for debit and credit card payments than Venmo.

Why Are PayPal and Venmo Separate?

PayPal is the parent company of Venmo, and it decided to keep Venmo’s business operations separate from its owner. By using Venmo, PayPal aims to attract a younger customer base.

Venmo’s features are quick, secure, and allow social interaction among its customers. With the world becoming more socially online, PayPal targets the younger generation through Venmo, thus increasing their income.

Is PayPal or Venmo FDIC Insured?

If you were unaware, FDIC-insured accounts are protected against bank failure or theft by the federal government. However, PayPal and Venmo are not a bank, so they are not FDIC insured.

You can transfer your PayPal or Venmo funds to an FDIC-insured bank if this worries you. This protects your funds if your bank fails or your funds are stolen.

Is Venmo or PayPal Cheaper to Send Money?

Both PayPal and Venmo charge an extra fee for instant transfers and credit card payments. There is also a fee for business transactions on digital cash platforms. Although when it comes to sending money, the best option may be to use Venmo.

Whether you are a business owner or freelancer, you must review each platform’s fees to know which one is better for sending money. You can view PayPal’s fees here. For Venmo’s fees, you can view them here.

Are Venmo and PayPal HIPAA Compliant?

Since PayPal owns Venmo, the platforms share data. So if you wonder whether Venmo is HIPAA compliant, you should look at PayPal first. 

PayPal uses multiple forms of security to protect consumers’ data. But, PayPal also collects and sells consumer data for advertising purposes, which is against HIPAA.

Also, PayPal has never signed any business associate agreements. Therefore, PayPal is not HIPAA compliant, so healthcare providers are not permitted to accept payments from clients or patients through PayPal. In addition, Venmo does not follow these two rules, so they are not HIPPA compliant.

Wrapping Up

PayPal Vs. Venmo: which is better to use? Hopefully, this article has helped you decide which services are best for you to use for your business. If you’re a freelancer or a babysitter, Venmo may be the better option. However, PayPal is the best option for businesses running online stores, and you can add Venmo as a payment option.

References

  1. https://www.statista.com/statistics/218493/paypals-total-active-registered-accounts-from-2010/
  2. https://www.atimeforcash.net/using-venmo-with-paypal/#more-2004679
  3. https://www.paypal.com/us/webapps/mpp/merchant-fees
  4. https://help.venmo.com/hc/en-us/articles/1500003204302-Business-Profile-Fees-